Volume 210 — Maryland Reports

<p>(Two Appeals In One Record.)</p>

<p>October Term, 1955.]</p> <p>(Two Appeals In Separate Records)</p>

DECLARATORY JUDGMENTS — <italic>Appropriate to Construe Insurance</italic><italic>Policy and Determine Rights and Obligations of Parties</italic>. The remedy of declaratory decree is appropriate to construe an insurance policy and to determine the rights and obligations of the insurer and insured under its provisions. Code (1951), Art. 31A, § 2. p. 452 INSURANCE — <italic>Renewal — Express Provision for — Renewal Prevents</italic><italic>Lapse, Extends Policy's Life — Not a New Contract</italic>. Generally, a renewal of an insurance policy by the payment of a new premium and the issuance of a receipt therefor, where the renewal is in pursuance of a provision to that effect, is not a new contract, but an extension of the old. Thus, where an accident policy contains an express provision for its renewal by payment of the premium annually in advance, a renewal prevents the lapse of the policy and extends its life, and does not constitute a new contract. p. 454 INSURANCE — <italic>Renewal — No Provision for — Renewal Is New</italic><italic>Contract Requiring Mutual Consent — Terms Continued unless</italic><italic>Otherwise Expressed</italic>. A renewal of an insurance policy by the payment of a new premium and the issuance of a receipt therefor, where there is no provision in the policy for its renewal, is a new contract in that it cannot be made without the mutual consent of the parties and a meeting of the minds on all the essential terms of the contract. The parties may renew the policy on terms different from those contained in the original contract; but the terms of the policy, unless otherwise expressed, are not changed by a renewal, but are merely continued in force as binding upon the parties. pp. 454-455 INSURANCE — <italic>Health and Accident — Acceptance of Renewal</italic><italic>Premium Optional with Insurer — Insured Has No Contract Right to</italic><italic>Renewal</italic>. Generally, where a health and accident insurance<page_number>Page 450</page_number> policy provides that its term shall end on the date when any renewal premium is due, and payment by the insured of the renewal premium and acceptance of it by the insurer are required to keep the policy in continuous force and effect, and acceptance of the premium is optional with the insurer, the insured has no contract right to a renewal of the policy and cannot renew it except with the assent of the insurer. p. 456 INSURANCE — <italic>Health and Accident — Right of Insurer to Cancel</italic><italic>at Any Time by Returning Unearned Premium and to Accept or Refuse</italic><italic>Renewal Premium</italic>. If a health and accident insurance policy provides both (1) that the insurer has the right to cancel the policy at any time by returning the unearned premium, and (2) that the insurer has the option of accepting or refusing renewal premiums, there is no question that the insurer could cancel the policy at the end of the term by refusing to accept the renewal premium. pp. 457-458 INSURANCE — <italic>Health and Accident — Held Insurer Could Not</italic><italic>Cancel During Term for Which Premium Paid, But Could Terminate at</italic><italic>Renewal Date</italic>. A health and accident policy contained a non-cancellable clause providing that the insurer could not cancel it "* * * for any cause * * * during any period it is actually in force * * *". It also provided that a renewal, like the original contract, would not be in force until the premium "has been actually received, accepted and acknowledged at the Home Office". This Court <italic>held</italic> that the policy clearly evidenced a contract of term insurance which the insurer could not cancel during any period for which the premium had been paid, but could terminate at any date when renewal was due. While not setting forth the length of the original or a renewal term, the policy provided that the last premium receipt should state when the renewal premium was due, and that acknowledged acceptance of payment of the premium shall renew the policy "for such term as the payment shall cover". pp. 457-458 INSURANCE — <italic>Health and Accident — Exercise of Right to Refuse</italic><italic>Renewal — Insurer Held Not Estopped by Acceptance of Previous</italic><italic>Renewals</italic>. Where an insurer seasonably exercises an option to<page_number>Page 451</page_number> terminate a health and accident insurance policy, the policyholder cannot invoke the doctrine of estoppel merely because the insurer did not choose to exercise the option before the close of some previous term. This rule applied in the instant case, where the insurer accepted renewal premiums unconditionally for a number of years and then exercised its right to refuse an unconditional renewal of the policy. p. 459 J.E.B. <italic>Decided July 11, 1956</italic>.